Sunday, April 11, 2021

EU seeks anti-China alliance on tech with Biden

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Europe on Monday proposed teaming up with incoming U.S. President Joe Biden to squeeze China out of the global technology trade.

Exhausted by four years of trade tensions on two fronts, fighting against both U.S. President Donald Trump on one flank and Beijing on the other, Europe is trying to seize an early initiative ahead of Biden’s inauguration on January 20 by rolling out geostrategic plans for closer transatlantic cooperation.

At a closed-door meeting to discuss Europe’s strategy, Sabine Weyand, Brussels’ top trade bureaucrat, told lawmakers from the European Parliament that the European Commission would propose a “Transatlantic Trade and Technology Council” to set joint standards on new technologies, according to two people in the room.

This would target one of the big objectives of both the Europeans and Americans: Preventing China from establishing economic dominance across a number of high-value sectors by developing its own widely used technological and industrial standards.

A Commission paper to EU countries mapping out a strategy for a transatlantic alliance against Beijing also mentioned that proposal.

“The EU is proposing to establish a new EU-U.S. Trade and Technology Council (TTC),” the paper read.

“The aim will be to … strengthen our technological and industrial leadership and expand bilateral trade and investment. It will focus on reducing trade barriers, developing compatible standards and regulatory approaches for new technologies … As part of this, there should be … closer cooperation on … investment screening, Intellectual Property rights, forced transfers of technology and export controls.”

Valdis Dombrovskis, the EU’s super-commissioner for economy and trade, first floated the plan at a meeting with EU trade ministers this month, where he said the EU and U.S. should “cooperate on new technologies and digital services and be aligned on regulation and standards.”

EU officials said the plan was to resuscitate those parts of the failed Transatlantic Trade and Investment Partnership (TTIP) negotiations that focused on regulatory cooperation on emerging technologies such as artificial intelligence and self-driving cars, where both Washington and Brussels fear that China stands to become the global standard setter.

One senior Commission official described the tech alliance as a “low-hanging fruit,” since the EU and U.S. had already planned to establish a joint committee that would coordinate regulations on future technologies as part of their frozen negotiations on their earlier TTIP mega deal. “It’s very hard to align rules on products that already exist, but it is fairly easy to do it on emerging technologies,” the official said.

Both Weyand and the other senior official argued a resumption of TTIP negotiations was not back on the cards, both because of fierce public opposition to the deal and because negotiations had become stuck over things like EU protections for agriculture and U.S. public procurement discrimination with the Buy America Act, which Biden has said he wants to ramp up rather than dismantle.

But the thinking in Brussels now is that disagreements on chemical rinses for chicken and public infrastructure contracts should not hinder the EU and U.S. from working on joint rules for technologies like next-generation wireless networks.

As part of that new “positive agenda,” Brussels would also seek to set common rules on industrial subsidies and investment screening, while working with Washington to reform the World Trade Organization, the senior Commission official said.

Much will depend, however, on the overarching political atmosphere between Brussels and Washington, which could well sour over what the U.S. sees as unfair regulatory action against its biggest digital champions, both in terms of competition cases and tax.

Diplomats from EU countries will on Tuesday discuss the Commission plan along with proposals to work more closely on coronavirus vaccine distribution, climate change, and foreign policy, including a proposed “Summit of Democracies” that the EU wants to organize with the U.S. next year, according to one of the diplomats.

Jacopo Barigazzi and Barbara Moens contributed reporting.

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